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  • John Fredriksen's 10% Dividend Machine: No, Not Seadrill Or Frontline [View article]
    * Seadrill may move to London, Singapore

    * CEO Thorkildsen disagreed with move, leaves firm

    Shipping tycoon John Fredriksen announced on Wednesday plans to move management at Seadrill out of Norway, prompting the chief executive of the world's biggest deepsea drilling rig owner to leave and opening a new chapter in Fredriksen's controversial love-hate relationship with his former homeland.

    Seadrill's chief executive Alf Thorkildsen disagreed with the step and announced his departure, to be replaced by Fredrik Halvorsen, a key executive at two Fredriksen companies, well services firm Archer and Frontline.

    "The message from the company was clear that they are considering moving and this should be priority number one," Thorkildsen was quoted as telling Norwegian online news portal E24. "So I decided it was time to go."
    Thorkildsen was reported as saying that Norwegian costs were indeed very high but Fredriksen's "attitude" to Norwegian authorities was a factor.

    Oslo-born Fredriksen, known as "Big Wolf" for his bold business deals, has been in dispute with the Norwegian authorities for years and has traded his citizenship for a Cypriot passport, calling the move an "escape".

    He now lives in London but often criticises the government of his former homeland, where he was once detained for several months during a fraud investigation before being cleared of wrongdoing.

    http://bit.ly/PYZrB8
    Oct 4, 2012. 10:52 AM | 1 Like Like |Link to Comment
  • John Fredriksen's 10% Dividend Machine: No, Not Seadrill Or Frontline [View article]
    "The Company intends to use the net proceeds of this offering to invest in new assets within the shipping and offshore sectors and for general corporate purposes, including working capital."

    Seems to me J.F. and his team consider the current economic climate with depressed values, especially in shipping, an opportune time to make a few well-thought-out investments. The offshore market is booming, so why not make a few investments there as well. The stock markets have been stalling as of late, so better to place shares now instead of waiting.
    Oct 2, 2012. 11:03 AM | 2 Likes Like |Link to Comment
  • John Fredriksen's 10% Dividend Machine: No, Not Seadrill Or Frontline [View article]
    On Frontline, FRO earned on average $31,000 per day in Q2 2012 compared with $25,600 per day in Q1 for the whole VLCC fleet. The Suezmax fleet in the Orion Tanker Pool earned $17,400 per day in Q2 compared with $19,200 per day in Q1. Frontline earned on average about $16,200 per day in Q2 2012 compared with $19,500 per day in Q1 for the whole Suezmax fleet. OBO earned $28,100 per day in Q2 compared with $37,800 per day in Q1, mainly due to redelivery of vessels on charters. Frontline outperformed peers for VLCC in Q2, but the earnings for Suezmax was disappointing.

    Frontline’s estimated average cash cost breakeven rates for remainder 2012 are approximately $23,900 per day for VLCC's, $17,600 per day for Suezmaxes and $12,300 per day for the OBO's. The number of vessels in FRO’s fleet in Q2 2012 was 57 vessels: 36 double-hull VLCCs, 2 single-hull VLCCs, 15 double-hull Suezmaxes and 4 OBOs.

    Details Frontline Restructuring December 2011: http://bit.ly/WdvpMq

    Frontline’s balance sheet Q2 2012: http://bloom.bg/VaO8u1

    Frontline’s fleet list, October 2012: http://bit.ly/Wdvsb2

    Frontline's newbuilding program as of Q2 2012 encompasses 2 Suezmax tankers, total contractual cost $125 million. Paid installments $12.6 million, to be paid $112.4 million: $25 million in 2012, $87 million in 2013.

    Frontline’s strategy is to try to dispose of older ships which are not performing or even covering the operating cost. They have reduced cash breakeven rates following the restructuring end of last year, giving some downside protection. I cannot say exactly how much ownership FRO currently has in Frontline 2012. I read 7.9%, but that seems a bit low.

    Effective 1 January 2013, Nordic American Tankers (http://bit.ly/VaOcKi) will assume 100% ownership of the Orion Tanker Pool - established autumn 2011 -, purchasing Frontline’s 50% share in Orion at nominal book value. Orion’s deal with ExxonMobil (http://bit.ly/tVVFv0) - announced May 2012 - is expected to remain in place.
    Oct 2, 2012. 08:20 AM | 4 Likes Like |Link to Comment
  • Seadrill's Long-Term Contracts And 3 IPOs By Mid-2013 Secure Growth [View article]
    It does feel like high stakes poker at times, big bets are fine as long as you’re able to play them correctly. It’s almost getting to the point where you would prefer speculative building and debt issuance to take a breather until the newbuilds for 2013 and 2014 are delivered and drilling away.

    Transocean announced four new UDW drillships as well, backed by a letter of intent from a NOC or IOC, associated contract backlog $7.6 billion for 40 rig years (4 X 10Y).
    Sep 24, 2012. 10:25 AM | Likes Like |Link to Comment
  • Seadrill's Long-Term Contracts And 3 IPOs By Mid-2013 Secure Growth [View article]
    Well Imkul, thanks for the 'interpretation' and 'tips' (Pats on the back, the necessity of it all, much to contemplate). Let’s compare alpha sometime, you undoubtedly rock.

    I'm reminded of Edward Abbey: 'An empty man is full of himself' (,and 'a drink a day keeps the shrink away').

    Have a good trading day!
    Sep 24, 2012. 10:19 AM | Likes Like |Link to Comment
  • Seadrill's Long-Term Contracts And 3 IPOs By Mid-2013 Secure Growth [View article]
    Offshore drilling services firm Seadrill Ltd (SDRL) is spinning off its offshore rig business to a new company to be called Seadrill Partners LLC. If a filing with the SEC, Seadrill Partners said it will seek $225 million in a public offering at a yet-to-be-determined date. The company did not say how many shares would be offered, but did say the firm would trade on the NYSE under the ticker symbol ‘SDLP’.

    Seadrill Partners said it is an “emerging growth company” that currently has long-term contracts with oil majors Chevron Corp. (http://bit.ly/rBKwmy), Total SA (http://bit.ly/ontL3t), BP plc (http://bit.ly/yQLIVc), and Exxon Mobil Corp. (http://bit.ly/tVVFv0).

    Seadrill Ltd. will own 70% of the common units of Seadrill Partners following the IPO. The new company also plans “to make accretive acquisitions of drilling rigs from Seadrill and third parties” under an agreement that will give Seadrill Partners a first right to purchase additional interests in a jointly owned operating company and “a right to purchase any drilling rigs acquired or placed under contracts of five or more years after the closing date of this offering.”

    According to the filing, Seadrill Partners will use the proceeds from the filing “as consideration for the acquisition of our interest in [the jointly owned operating company] from Seadrill.”

    Operating revs moved from $478.3 million in FY10 to $497.2 million in FY11. For the first six-months of FY12, revs improved 11 percent to $275.2 million. Net income for FY10 was $176.5 million, dipping to $141.1 million in FY11. For the first-half of 2012, net income rose 5.6 percent to $93.9.

    Citigroup is the sole underwriter of the offering.
    Sep 22, 2012. 08:01 AM | Likes Like |Link to Comment
  • Seadrill's Long-Term Contracts And 3 IPOs By Mid-2013 Secure Growth [View article]
    You gotta love Fredriksen, if you invest in several of his companies for a decade you usually double your money and get a couple of IPO's to boot, which tend to spin-off assets as well.

    Ship Finance was spun off from Frontline. SFL is now planning to spin-off its container division at some point. Fredriksen is looking into orders for containership newbuilds. Ship Finance's second-quarter $61.2 million profit did include a $16.3m cash sweep from Frontline.
    Sep 20, 2012. 09:39 AM | Likes Like |Link to Comment
  • Seadrill's Long-Term Contracts And 3 IPOs By Mid-2013 Secure Growth [View article]
    Don't sweat it Shin, we’re already in a situation of ‘why even bother’. Power Hedge, White, Qineqt are posting Seadrill articles every week, literally. Rehash here, fleet report there. Pushing down Valuentum, Jensen, Dumb Money. First Seadrill, Transocean. Noble, Ensco followed quick enough, check publication. Remember, trading is net return, not hit rate!
    Sep 20, 2012. 09:26 AM | Likes Like |Link to Comment
  • Seadrill's Long-Term Contracts And 3 IPOs By Mid-2013 Secure Growth [View article]
    Imkul,

    That warrants a response! You should have noticed that I actually linked!!!! to the original Bloomberg article which provided the excerpts used for the introduction of this article.

    2/3 of the information in this article is from other sources than the >linked< article. I also read the article on Fredriksen a few days ago, and I consider that article to be top-notch journalism (very rare nowadays), and feel no qualms at all! about wanting to share parts of that interview with my fellow SA-readers in this piece, while >linking< to the BB-article at the same time!

    Most of the information included in articles here on SA originates from other sources. Be careful with using words like 'plagiarism' in the future, when someone clearly inserts the >link< to the original piece!

    I have been (very) critical of Seadrill's high leverage business model in the past, as some of you may know. Additional insight and information gathered in the past two weeks, and the Bloomberg interview, have firmly changed my mind on this company and Fredriksen's overall leadership of Frontline and Seadrill. Therefore I feel it's useful to share this with you guys. And yes, I actually opened a position in Seadrill.
    Sep 18, 2012. 02:37 AM | 7 Likes Like |Link to Comment
  • Seadrill's 8.4% Dividend Yield, Strong Revenue Growth Make It A Must-Buy Stock [View article]
    Your numbers are inaccurate; your PEGs and especially your P/S for Transocean is way off. You leave Noble Corporation out and recommend a driller with 3 times more debt-to-equity than NE, 2 times that of ESV, and 1.5 times that of RIG, primarily because of a dividend. Clever to use enterprise value, .but you should have provided a link to SDRLs balance sheet for the past quarters. Look what is going on with total equity, look at liabilities
    Sep 7, 2012. 03:46 PM | 6 Likes Like |Link to Comment
  • We Don't Think SeaDrill's Dividend Is Sustainable [View article]
    Agree with the title, Valuentum's / Brian Nelson's analysis is spot on. There are better opportunities out there. Yes, dayrates are on the rise, but all drilling contractors are profiting from this, not just SDRL.

    Why go for the number four driller, when numbers two and three have largely brand new fleets as well, much stronger financial positions, more flexibility due to low debt and conservative financial policies, equally impressive growth.

    Since when have dividends become more important than balance sheets?

    Article on number two drilling contractor Ensco (http://bit.ly/Gztvwv):
    http://bit.ly/NYiQz2

    Article on number three drilling contractor Noble Corp (http://bit.ly/N0itJu):
    http://bit.ly/NYiSqu

    Rigs + newbuilds:
    ESV: 80
    NE: 79
    SDRL: 66

    Balance sheet ESV: http://bloom.bg/QkErSL
    Balance sheet NE: http://bloom.bg/Q3NfAh
    Balance sheet SDRL : http://bloom.bg/QkEtdj

    Numbers speak louder than words, simple arithmetic (to quote B.C.)

    Compare liabilities, compare equity. Either ESV and NE are under-priced, or SDRL is overpriced. You can't have it both ways.
    Sep 7, 2012. 08:05 AM | 3 Likes Like |Link to Comment
  • Going Deep With Seadrill [View article]

    Why go for the number four driller, when numbers two and three have largely brand new fleets as well, much stronger financial positions, more flexibility due to low debt and a conservative financial policy, equally impressive growth.

    Since when have dividends become more important than balance sheets?

    Article on number two drilling contractor Ensco (ESV):
    http://seekingalpha.co...

    Article on number three drilling contractor Noble Corp (NE):
    http://seekingalpha.co...

    Number of rigs incl newbuilds under construction?
    ESV: 80, NE: 79, SDRL: 66

    Balance sheet ESV: http://bloom.bg/QkErSL
    Balance sheet NE: http://bloom.bg/Q3NfAh
    Balance sheet SDRL : http://bloom.bg/QkEtdj

    Numbers speak louder than words, simple arithmetic (to quote B.C.)
    Sep 7, 2012. 07:56 AM | Likes Like |Link to Comment
  • Transocean's Value Proposition, Part Two: Profit Soars, Macondo Settlement On The Horizon [View article]
    Seadrill is a Norway-listed, Bermuda-based rig operator, not a U.S. company. Its chairman is John Fredriksen, Frontline-Fredriksen. Fredriksen had to backstop Frontline (FRO) when seaborne trade collapsed, and therefore shipping rates. Frontline cost U.S. investors a lot of money. Until FRO went down the tubes it had a similar shareholder, debt, and spin-off policy as SDRL. FRO is your perfect example why too much debt is bad when the market turns against you. It does happen, also in the contract drilling business.

    Ensco (http://bit.ly/Gztvwv) and Noble (http://bit.ly/N0itJu) also have a largely brand-new deepwater and ultra-deepwater fleet (so has RIG by the way). Even with SDRL's rigs on order, RIG, ESV and NE will remain the top-3 drillers. They all have much, much lower debt-to-equity than SDRL. RIG has never had a continuous dividend, they determine their policy on a yearly basis. ESV and NE both pay steady and growing dividends, at a realistic long-term level, unlike SDRL. One major setback and SDRL could be in trouble, I say could! If you like a driller with the size of SDRL, you should check out Diamond (http://bit.ly/vjU5Q3), debt-to-equity is 0.33 instead of 1.75 for SDRL.
    Aug 21, 2012. 07:28 AM | 4 Likes Like |Link to Comment
  • Transocean's Value Proposition, Part Two: Profit Soars, Macondo Settlement On The Horizon [View article]
    You're THE LEADER when your 'business' is 'leading' in terms of rigs, size and revenue. Market value means squad. SDRL's dividend and market value are a joke when you realize their debt-to-equity is 1.75, when you have ESV at 0.43 and RIG at 0.82. SDRL is way overvalued compared to its peers. There's much more, but this is sufficient for now until you further elaborate.
    Aug 18, 2012. 07:58 AM | 1 Like Like |Link to Comment
  • Transocean's Value Proposition, Part Two: Profit Soars, Macondo Settlement On The Horizon [View article]
    Dayrates are strong across all asset classes in all regions due to undersupply. All operators have discussed upward-trending dayrates and undersupply in all regions. You can hardly go wrong with any of them.
    Aug 11, 2012. 02:17 PM | Likes Like |Link to Comment
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